Australian Property

Viewing posts in the Australian Property category

Wollongong council pimps first home buyers

ScreenHunter_4733 Oct. 31 14.57 By Leith van Onselen In what could easily be some kind of Halloween joke, the Illawarra Mercury this week spruiked a new home deposit scheme that would provide low-to-middle income first home buyers (FHBs) with assistance to get "into the housing game": The West Dapto Home Deposit Assistance Program is the first of its kind and is designed to allow low-to-middle-income singles, couples or families to buy a new house or land package in the suburb’s new release area. The grants will be administered through a partnership between IMB and the council and will be available for loans worth up to...
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Investor mortgage growth accelerated in September

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of September: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.2% MoM; 0.6% QoQ; 1.0% YoY) and business credit growth (0.5% MoM; 0.7% QoQ; 3.8% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.6% MoM; 1.7% QoQ; 6.8% YoY) is stronger, but remains below its long-run average growth rate; although it is still growing more than twice as quickly as wages and off a very...
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RP Data: home prices up 1.1% in October

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen RP Data's price results are in for October, with the daily index recording a 1.08% rise over the month at the 5-city level, with values rising in Sydney, Melbourne and Brisbane, but falling in Adelaide and Perth (see next chart). It was the fifth consecutive monthly increase in values, with values also up by 2.37% over the quarter (see next chart). Price growth appears to be well past its peak, with annual growth trending down nationally on the back of Sydney and Melbourne (see next chart). Values are now 11.4% above the October 2010 peak at the 5-city...
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It’s time to ban SMSF leverage

Its_Time_badge By Leith van Onselen The AFR is reporting today that self managed superannuation funds (SMSFs) are gearing into property at an increasing rate, with the amount of debt held in limited-recourse mortgages more than tripling from "$2.5 billion at the end of June 2012 to $8.7 billion at the end of June 2014". A few weeks back, former Treasurer, Prime Minister, and architect of Australia's compulsory superannuation system, Paul Keating, called for curbs on SMSFs using leverage to invest in Australian residential property, arguing that it "is making it nearly impossible for younger people,...
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AFP pursues dodgy Chinese realty

chinese-corruption From the AFR: Government-run media outlets in China have speculated for years that Gao Yan, a former high-ranking Communist Party official, alleged to have stolen millions of dollars in state assets, fled to Australia in 2002. One source has confirmed the ­Australian Federal Police is ­investigating property linked to Mr Gao’s son, Gao Xinyuan. This raises the prospect the Gao family is on a ­target list put together by the AFP and Chinese authorities as part of a joint effort to trace and freeze illicit assets. ...Tracking down officials hiding overseas and confiscating their assets has...
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How big are Australia’s developer land banks?

ScreenHunter_18 Jul. 05 10.22 By Leith van Onselen Prosper's David Collyer has released an excellent new report examining listed developer land banks in Australia, using data derived from ASX annual reports. Below are the key extracts. First Collyer examines some of the underlying reasons behind land banking, which support my own views (outlined here): Listed property developers report their land holdings to the Australian Stock Exchange, which opens a window into the murky world of ‘englobo’ landbanking. Their 2014 annual accounts show they have 272,000 lots in development, with a disclosed end value of $81...
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Weekly RP Data Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 30 October 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, was essentially flat (+0.02%).  The result follows five consecutive weekly increases (see next chart). Home prices rose in Sydney and Brisbane, were essentially flat in Melbourne and Adelaide, and tanked in Perth (see next chart). Values are up by 1.11% so far in October, with all major capitals except for Adelaide rising (see next chart). Since the start of the year, home values nationally have risen by 7.49%, with...
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HIA new house sales decline steepens

5 From the HIA: Total seasonally adjusted new home sales went sideways in the latest update, for September 2014. The flat result follows a modest increase (of 3.3 per cent) in August and a reasonably significant drop (of 5.7 per cent) in July. As we noted in the August report, a downward trend is in place for new home sales. This downward trend is clearly evident for detached house sales. On the other hand, multi-units sales have gained a second wind since June this year. The result for September reinforced these trends. Seasonally adjusted detached house sales fell by 2.3 per cent in...
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Mining town property markets crash spectacularly

ScreenHunter_4683 Oct. 30 07.37 In this week's SQM Research free weekly newsletter managing director, Louis Christopher, provided a detailed update on conditions in Australia's mining town property markets, which are experiencing a sharp downturn, particularly in hard commodity towns associated with iron ore and coal: It has been sometime since we wrote an update on the mining town property crash that has taken place around Australia, most notably in Western Australia. We last wrote a special in our 2013 Housing Boom and Bust Report. At the time we made note the “hard commodity towns” had well and truly entered their...
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Moody’s warns on rise of interest only loans

sfvq From Moody's today: An increase in the number of Australian “owner-occupier” home buyers who are taking out interest-only  (IO) mortgages is credit negative for future Australian Residential Mortgage Backed Securities (RMBS)  because such loans have a higher risk of delinquency and default, particularly if interest rates rise from their  current record low levels. Over the past year, a notable rise has occurred in the amount of IO loans in Australia and owner-occupiers  -- people who buy a home to live in, as opposed to investors who buy to rent out -- are accounting for a  growing share...
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Do liberals kill housing affordability?

539w By Leith van Onselen Trulia's chief economist, Jed Kolko, has produced an interesting analysis showing how the more liberal Democratic strongholds in the US tend to have far lower housing affordability than the more conservative Republican states: Trulia categorized the 100 largest metros as red [Republican] or blue [Democratic] depending on their 2012 presidential vote. ...when we compare red and blue markets in terms of affordability and related measures... none of the 10 reddest markets had a median asking price per square foot above $130 in Sept. 2014. But nine of the 10 bluest markets did....
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NSW Budget booms on property, until…

ScreenHunter_4529 Oct. 16 07.50 By Leith van Onselen The New South Wales Government yesterday released the final result for the 2013-14 State Budget, which revealed a surplus of $1.247 billion driven by a huge lift in stamp duty receipts on the back of the booming housing market. The result is a huge turnaround from the $329 million deficit originally forecast for 2013-14. The General Government Sector Budget Result was a surplus of $1.2 billion, and the Net Operating Balance of the Total State Sector was a surplus of $2.8 billion. The improvement over the original 2013-14 Budget forecast largely reflected stronger than...
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Saul Eslake on the housing bubble

PC_narrow_28Oct-aussie-housing-300x0 From the SMH blog, here are Saul Eslake's six reasons for the property bubble: • First, research suggests homes in cities with populations of over 1 million tend to attract a premium, and the “proportion of Australians living in cities with populations of over 1 million is higher than in anywhere else in the world, apart from Hong Kong and Singapore”. • Second, Aussies cities are spread out, and public transport and arterial roads in the outer suburbs are “generally inadequate”. Hence city dwellers prefer to spend more on housing to live nearer the centres of work to cut...
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Pascometer burns red on negative gearing

imgres30 Weeoo, weeoo, weeoo, from The Pascometer: Poor old negative gearing, carrying the can for perceived housing affordability problems, fitted up as a convenient scapegoat, so much easier to blame it than to deal with the myriad factors bearing on housing supply and demand. The ability to offset losses on one investment against income made elsewhere has actually served the overall Australian economy well and done plenty of positive things for housing affordability as well. (That probably sounds like heresy, but I'll come  back to it.) Anyway, there's no need to expend too much energy attacking...
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RBA’s Ellis mis-diagnoses Australian housing

ScreenHunter_01 Jun. 28 09.52 By Leith van Onselen The RBA's head of financial stability, Luci Ellis, delivered another thinly veiled defence of Australia's exorbitant housing costs in a presentation last night to an urban planning seminar at Sydney University. From The Canberra Times: ...people's ability to service existing mortgages had not changed much in the past 10 years. During that time, houses prices had fallen as well as risen, she said. "Prices have risen faster than consumer prices, but they have not risen materially faster than household incomes," she said... The current low-interest, low-inflation,...
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ACA does Chinese property investment

dfgw By Leith van Onselen Last night, A Current Affair (ACA) presented a detailed segment on Chinese investment into Australian property, which showed frenetic auctions of pre-existing homes being undertaken in Mandarin, along with some interesting interviews with market participants, including Dave Platter who works for Juwai.com, which markets Australian homes direct to Chinese buyers. Definitely worth a watch, and should place more heat on Australia's ineffective and broken foreign investment...
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Low-doc rears its ugly head

Font2 From The Australian: LOW-DOC loans — or “liar’s loans” as they are known in the US — have become even easier to obtain as lending standards ­loosen, with non-bank lenders ­aggressively spruiking the controversial products by slashing interest rates and offering cashback giveaways and cruises. The loans, which do not ­require borrowers to provide tax returns and are used by tax-avoiding small business owners, have traditionally carried interest rates substantially above standard loans. However, as lending standards across the financial sector weaken — and the demand for residential...
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More Aussies tap super to pay-off mortgages

ScreenHunter_36 May. 03 14.05 By Leith van Onselen The Department of Human Services (DHS) has released its 2013-14 Annual Report, which revealed that the number of Australians seeking to access their superannuation early jumped 7% over the financial year to 19,286, which was the highest level since the Global Financial Crisis (see next table). The Early Release of Superannuation Benefits program allows eligible people to draw on their superannuation benefits under specified compassionate grounds in a time of need. As shown above, around three in five applications to release super early were approved by the DHS,...
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Joye: Macroprudential is coming

Gabbo-is-coming From Chris Joye at AFR: The good news for those concerned about burgeoning bank balance-sheet risks is that our most conservative regulator on the financial stability front, APRA, is bound to act before the year is out. The first phase of this campaign was the public jawboning and targeted communications to institutions that have perhaps been a little too enthusiastic in their efforts to push leveraged housing investments. Round two will likely see the introduction of capital charges on higher risk loan categories, including interest-only investment products, which will make this finance “more...
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A housing bubble bear capitulates

images Rob Burgess at Business Spectator was a long time property bubble bear, but no longer: The long-entertained view that house prices would fall back so that they were more in line with the price-to-income ratios seen in the 1990s begins to look like a false hope -- and I write that as someone who took part in Steve Keen’s 280km ‘Debt March’ in 2010 to highlight the ‘problem’ of Australia’s ballooning mortgage debt stock. A sharp price correction could still happen, but it looks increasingly likely that what we have observed is a historic ‘maturing’ of the finance industry that...
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Housing overvalued and vulnerable to correction

ScreenHunter_30 Oct. 10 06.15 By Leith van Onselen Deloitte-Access Economics released research over the weekend claiming that Australian house prices were 10% over-valued against incomes and risked a correction amid slowing income growth and possible rising unemployment as the China-led commodity boom unwinds. From The Australian: “Our measure showing prices are 10 per cent overvalued is in ‘alert but not alarmed’ territory. However, it is certainly not a bubble”... The Australian housing market risked crashing in 2004, but was rescued by the China minerals boom, which boosted incomes and re-established...
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Noose tightens on dodgy Chinese money flow

chinese-corruption From the AFR: ...two wedding gifts were just the beginning of what Su, the son of a powerful Chinese railway official, would receive during his time in Australia. After his father, Su Shunhu, was ­sentenced to life in prison for corruption by a Beijing court last Friday, an investigation by AFR Weekend has pieced together the money trail between China and Australia. ...[$1.2 million] was wired to Australia from both the industrial city of Nanchang, south west of Shanghai, and Hong Kong in ­16 separate instalments. Since it began landing in Australia, the couple have bought and sold...
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Auction clearances lift

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate rose over the weekend, on the back of increases in Melbourne and Sydney. According to RP Data, the national weighted average preliminary auction clearance rate was 70.5% over the weekend, which was up 2.0% from the 68.5% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 2.6% to 78.1%, whereas Melbourne’s rose to 70.6% (last weekend 68.0%). Brisbane, which typically only has a small number of auctions, experienced little change in its clearance rate (up 0.1% to 50.6%). Overall auction volumes (2,445) were up slightly on last...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 26 October 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Doc Wilson: House prices flat for a decade

ScreenHunter_04-Apr.-17-20.53-200x200 You've got to love the Fairfax property spruik machine: Australia's property prices will be "flat as a pancake" over the next decade, Domain Group senior economist Dr Andrew Wilson says. The resources boom is over, the international economy "can't get its act together" and investors will soon start to lose interest. "Going forward we are going to have a much flatter housing market in terms of price," Dr Wilson said. Even growth in the stand-out city, Sydney - up 3.8 per cent in the September quarter and 16.6 per cent in the past year - is moderating from the higher levels of last year. ...There...
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